Investment flow into Southeast Asia growing

Southeast Asia drew $121 billion in foreign direct investment (FDI) last year, making it the only sub-region in Asia to experience FDI growth, the United Nations said yesterday. FDI inflows to Southeast Asia grew 2 per cent in 2012, according to the UN’s “Asia-Pacific Trade and Investment Report 2013”.

Inflows to East and Northeast Asia – a region that includes mainland China, Japan, Hong Kong and South Korea – were down 8 per cent in 2012, to $215 billion, the report said. China attracted $121 billion in foreign investment in 2012, down slightly from its peak of $124 billion in 2011.

“Rising production costs and weakening export markets have been pushing foreign companies to relocate from China to lower-income countries,” the UN annual report on trade and investment said.

Southeast Asia has benefited from the relocation trend, especially low-income countries such as Cambodia, Laos and Myanmar, said Mia Mikic, chief of the Trade Policy and Analysis section at the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

The Philippines attracted $3 billion of FDI in 2012, as a result of a more stable political and security environment and an influx of loans for reconstruction after various natural disasters that year, Mikic said.

“When you get a loan for repairing some of the damage, there is rebuilding and some investors also come in,” she said.

While Southeast Asia and China continued to be a major draw for FDI last year, India plummeted 29 per cent to about $25 billion. The UN attributed this to India’s slow economic growth in 2012, high inflation and “complex polices and cumbersome procedures”.

Southeast Asia drew $121 billion in foreign direct investment (FDI) last year, making it the only sub-region in Asia to experience FDI growth, the United Nations said yesterday. FDI inflows to Southeast Asia grew 2 per cent in 2012, according to the UN’s “Asia-Pacific Trade and Investment Report 2013”.

Inflows to East and Northeast Asia – a region that includes mainland China, Japan, Hong Kong and South Korea – were down 8 per cent in 2012, to $215 billion, the report said. China attracted $121 billion in foreign investment in 2012, down slightly from its peak of $124 billion in 2011.

“Rising production costs and weakening export markets have been pushing foreign companies to relocate from China to lower-income countries,” the UN annual report on trade and investment said.

Southeast Asia has benefited from the relocation trend, especially low-income countries such as Cambodia, Laos and Myanmar, said Mia Mikic, chief of the Trade Policy and Analysis section at the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

The Philippines attracted $3 billion of FDI in 2012, as a result of a more stable political and security environment and an influx of loans for reconstruction after various natural disasters that year, Mikic said.

“When you get a loan for repairing some of the damage, there is rebuilding and some investors also come in,” she said.

While Southeast Asia and China continued to be a major draw for FDI last year, India plummeted 29 per cent to about $25 billion. The UN attributed this to India’s slow economic growth in 2012, high inflation and “complex polices and cumbersome procedures”.